Four Opportunities for DME Providers to Protect the Bottom Line

 In Medical Billing & Claims

The industry’s efforts to reduce healthcare costs has hit the durable medical equipment (DME) market particularly hard. Medicare Advantage plans—projected to reach 22.6 million members this year[1]—often reimburse providers at lower rates than other plans.[2] And growing patient financial responsibility only adds to the pressure. Together, these challenges can negatively impact collections, slow cash flow, and increase downward pressure on revenue.

While many providers focus on cutting costs to offset these revenue challenges, you shouldn’t overlook other opportunities that could have an even greater impact.

Four Opportunities to Protect Your Bottom Line

1. Aim for Denial Prevention First

Nearly 90% of denied claims are avoidable[3] and 50% to 65% are never reworked[4], which leaves a lot of money on the table—money that could be used to bring on new staff to help manage pre-authorizations and workers’ comp claims, or to work with patients.

You can help avoid denials by proactively addressing the top reasons they occur: Incorrect or missing patient information, the patient isn’t covered, or the service isn’t covered.[5] In light of this, one of the most practical ways to reduce denials is to improve eligibility-verification processes. Using software that enables you to verify eligibility and coverage in real time—while the customer is checking out at your store—can help you avoid denials and reduce the risk of lost revenue; plus, using an automated vs. manual process also increases staff efficiency.

When looking for an eligibility solution, remember that breadth of payer connectivity is important. The more payers you have access to, the more accurate and effective the solution will be.

2. Change Your Denials Workflow

When denials do occur, many offices only rework those with the highest value. But, when combined, smaller denials can add up to thousands of dollars in missed revenue each year. As with eligibility software, denials software can automate portions of the workflow to make rework easier, facilitating faster resubmission and reimbursement. Having the ability to group denials by reason code or view the original claims side by side with the ERA can significantly reduce time spent on research. Some solutions also offer a library of appeal-letter templates that can be auto-populated, which further reduces rework time. Having the right tools can help give your staff the resources needed to work all denied claims so you recover more of the money you’re owed.

3. Improve Pricing Transparency

Imagine buying a shirt at your local department store where neither you nor the retailer knows what the shirt costs. The sales clerk tells you that you’ll be billed when the price is determined. That would be unacceptable in most industries, but it has been a common practice in healthcare. That’s changing. Now that patients are responsible for more of their healthcare costs, they expect price transparency for medical devices and services.

Patient-responsibility estimation software enables you to show customers what insurance will pay toward the cost of the product, and what they will owe. This helps you in two ways: First, you obtain the information needed to ask for full payment at checkout, driving collections, and secondly, you improve the patient experience. When customers learn their out-of-pocket cost upfront, it can build trust and satisfaction, and can help prevent the sticker-shock that often occurs when a ‘surprise’ bill arrives.

4. Make it Easier for Patients to Pay

Now that patient payments comprise a greater portion of your revenue, it’s imperative to remove obstacles that can impede a patient’s ability to pay. Much of the medical equipment patients buy or rent is expensive, and for those on fixed incomes, any amount of patient responsibility can be challenging. Not being able to pay can be embarrassing for the patient, can damage the patient-provider relationship, and can decrease patient satisfaction. And having unhappy customers in a highly competitive market can be detrimental to your business. Even worse, when patients can’t pay, they may be forced go without the care they need.

It’s important to offer a variety of tools that can address each patient’s unique financial situation. Here are just a few examples:

  • Point-of-service payment options that include cash, credit, and check
  • Patient-friendly billing statements that are easy to understand
  • Online portals to make payments more convenient
  • Phone payments for patients who aren’t comfortable paying online or who want another convenient option
  • Payment plans, including the ability to self-select a plan online

Providing patients with multiple payment options can help ensure they get the equipment they need while helping you get paid in full.


The Time to Act is Now

Decreasing payer reimbursements and higher patient-financial responsibility are here to stay. To offset the revenue impact of this new reality, you can leverage technologies that help improve workflow efficiencies, reduce denials, and make it easier to collect. With today’s new cloud-based solutions, there is no expensive hardware to install and maintain, and the solutions can be relatively easy to learn so offices can be up and running quickly.

Revenue Performance Advisor from Change Healthcare gives you the tools you need to help reduce denials, streamline workflows, and enhance the patient pay experience—all in a single, easy-to-use revenue cycle software solution that facilitates increased efficiencies, improved cash flow, fewer write-offs, and faster reimbursements.

1. “2019 Medicare Advantage and Part D Prescription Drug Program Landscape,” Centers for Medicare & Medicaid Services, September 28, 2018
2. “12 Trends in Patient Responsibility, up 29.4% Since 2015,” Laura Dyrda, Becker’s ASC Review, October 24, 2017
3. “An Ounce of Prevention Pays Off: 90% of Denials are Preventable,” Morgan Haines, Advisory Board, December 11, 2014
4. “The Cure for Claims Denials,” Richelle Marting, JD, MHSA, CPC, American Association of Family Practices, 2015
5. “The Top 3 Reasons Your Claims Get Denied,” AAPC Knowledge Center, April 16, 2013

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Aparna Higgins’ career has been focused on value-based payment. More than ten years ago, while she was at Booz-Allen, she co-led the design of...

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